Union leaders question pension offer

New pension proposals made yesterday means no worker within 10 years of retirement on 1 April 2012 would see an increase in the age they will retire nor will they see a decrease in the pension they will receive.

Treasury Minister Danny Alexander also announced an offer to extend 'costs ceilings' - the limit on contributions made by the government, and an increase of 8% on pension accrual rates.

Alexander illustrates the offer with an example:

A nurse with a lifetime in public service and a salary at retirement of £34,200 would receive £22,800 a year in pension payouts if the reforms are to be introduced. Whereas under the current 1995 NHS pensions scheme arrangements, they would only get £17,300.

Such changes could remain in place for up to 25 years.

"This generous offer should be more than sufficient to allow agreement to be reached with the unions," said Alexander.

"I hope on the basis of this offer the trade unions will devote their time to reaching agreement and not to unnecessary and damaging strike action.

Dr Hamish Meldrum, Chairman of the Council at the British Medical Association, said the government's claim that many workers will get a better deal under the enhanced pension offer is "questionable when you when you take into account that they will have to work for up to eight additional years, and pay a huge amount more in contributions."

While the TUC's General Secretary Brendan Barber has "welcomed the movement in the government's position", a lack of progress on negotiations regarding the raising of pension age and contributions mean plans for the TUC's Day of Action on 30 November "remain unchanged".

Union Unite believes the changes to the government's original proposals "are small relative to the losses its overall proposals involve".

"If it wasn't for the strength of feeling amongst public sector workers the government would have never made this change to its original and dreadful proposals," said Gail Cartmail, Unite's Assistant General Secretary.

"This is welcome, but it is a first step. Now the negotiations with the government can begin in earnest, but there is no time to waste. There is still a long way to go and Unite remains committed to the day of action on 30 November."

The Royal College of Nursing also remains "ready to ballot" its members for strike action as it claims continued negotiations are needed to "ensure there is a fair deal for the frontline".